Growth is fueled by rising demand for cleaner energy alternatives, robust government incentives, and expanding production capacity in key regions. North America, led by the United States, dominates 35% of the market, with production forecasted to reach 5.2 billion gallons by 2025, while Europe anticipates strong consumption growth of 26% in the same period. The sector’s sustainability is strengthened by a shift toward waste-based feedstocks such as used cooking oil and animal fats, complementing high-yield vegetable oils like soybean, rapeseed, and oil palm.
Chicago, Feb. 05, 2026 (GLOBE NEWSWIRE) — The global green diesel market was valued at 38.66 billion in 2024 and is expected to reach US$ 94.96 billion by 2033, growing at a CAGR of 10.50% from 2025 to 2033.
The green diesel market is undergoing a significant global expansion, boosted by strong regulatory frameworks and escalating demand for cleaner energy alternatives. In North America, specifically the United States, a notable uptick in production is anticipated, with forecasts showing an increase from 210,000 barrels per day in 2024 to 230,000 in 2025. However, after a period of rapid expansion, U.S. production capacity growth is expected to level off, growing by only 100 million gallons to a total of 5.2 billion gallons in 2025 and holding steady through 2026. This suggests a market consolidation phase as existing projects mature. Concurrently, Europe is bracing for a substantial demand surge, with consumption projected to climb by about 26% in 2025. To meet this, European production is also set to increase by about 16% in the same year, indicating a strong and growing market across the Atlantic.
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Waste-Based Feedstocks Drive Sustainability and Supply Diversification in Green Diesel Market
The global production terrain for the green diesel market has seen a dramatic increase, jumping from 12.45 million metric tons in 2022 to an estimated 23 million in 2024. This growth is further highlighted by the ambitious targets of major producers like Neste, which aims to elevate its sales to 6.8 million metric tons by 2026. A key advantage fueling this adoption is green diesel’s ability to significantly cut greenhouse gas emissions by more than 80% compared to conventional diesel. The industry is also seeing a strategic change in feedstock, with a growing preference for waste-based inputs like used cooking oil and animal fats. This move not only enhances the fuel’s sustainability profile but also diversifies the supply chain. Government incentives, such as the EU’s Renewable Energy Directive and the U.S. Renewable Fuel Standard, continue to be pivotal in propelling the market forward.
Green Diesel Market Anchored by High-Yield Vegetable Oils and Diverse Feedstock Portfolio
The foundation of the green diesel market is built upon vegetable oil, a feedstock whose dominance is demonstrated by overwhelming demand and production efficiency. Vegetable oil accounted for more than 32% market share in 2024. Projections for the 2025/26 marketing year show U.S. demand for soybean oil in biofuel production soaring to a record 15.5 billion pounds, a figure representing over half of all soybean oil produced domestically and accounting for about 45% of its total usage. This intense demand is reinforced by USDA forecasts projecting that soybean oil usage for biomass-based diesel will reach 13.9 billion pounds, emphasizing a sustained and large-scale reliance on this single crop for fueling the nation’s green energy transition.
This reliance is further supported by the sector’s feedstock diversity and high-yield potential. While soybean is a leader, the green diesel market also leverages rapeseed, sunflower, and non-edible oils like rubber seed to mitigate the “food vs. fuel” debate. The efficiency of certain crops is remarkable; oil palm can yield up to 4,736 liters per hectare, while non-edible jatropha oil can be converted with a yield surpassing 95%. Even maize (corn) shows strong potential with a conversion-to-ethanol efficiency of 400 liters per tonne. This combination of massive scale, crop efficiency, and growing diversity cements vegetable oil’s unassailable position as the primary input for the global market.
Drop-In Fuel Advantage: Hydrothermolysis Produces Diesel Chemically Indistinct from Petroleum
Catalytic hydrothermolysis, a form of hydrotreating, stands as the premier production technology within the green diesel market, with more than 68% market share, thanks to its superior efficiency and the high quality of the fuel it produces. Its market dominance is clear, with related technologies like Ecofining projected to command about 84.33% of the Hydrotreated Vegetable Oil (HVO) market revenue in 2025. This preference is driven by its ability to create a “drop-in” fuel that is chemically indistinct from petroleum diesel, boasting a much higher cetane number of 70-90 compared to conventional diesel’s 40-55. This results in better engine performance and a remarkable shelf life of up to ten years.
The technical merits of hydrothermolysis are undeniable. The process achieves exceptional deoxygenation efficiencies of up to 95%, with total liquid hydrocarbon yields from vegetable oils ranging between 70% and 90%. This high conversion rate, associated with the ability to decrease greenhouse gas emissions by up to 90%, makes it the most environmentally and commercially viable option. Its adaptability is further proven via co-processing, which allows existing refineries to enter the green diesel market with minimal investment. This blend of high efficiency, superior product quality, and infrastructure compatibility ensures catalytic hydrothermolysis remains the cornerstone of green diesel production.
Federal Incentives Drive U.S. Consumption, Balancing Record-Breaking Green Diesel Supply
Currently, North America controls the largest 35% share of the global market. Wherein the United States is the key contributor. The United States has firmly positioned itself as the global leader in the market, undergoing a period of unprecedented expansion in production abilities. As of early 2024, the nation’s production capacity already stood at a formidable 4.3 billion gallons per year, a figure set to be augmented by an additional 800 million gallons within the year. This aggressive growth trajectory is estimated to elevate the total capacity to an impressive 5.2 billion gallons by 2025. This expansion is directly mirrored in output, with average daily production climbing from 210,000 barrels in 2024 to a forecasted 230,000 barrels per day in 2025. This surge highlights a strategic national push, transforming the U.S. into the central hub of global green diesel production.
This production boom is met with equally strong domestic demand, creating a balanced and self-sustaining green diesel market. Consumption is expected to hold steady at a strong 240,000 barrels per day through both 2024 and 2025, indicating that the market is readily absorbing the escalating supply. This high level of consumption is largely driven by powerful federal and state-level incentives designed to decarbonize the transport sector. Even with its massive domestic output, the U.S. is anticipated to remain a net importer of renewable diesel, requiring an average of 20,000 barrels per day in 2025. This slight deficit highlights the sheer scale of American demand, solidifying the U.S. market as the world’s most dynamic.
Green Diesel Market Major Players:
- Neste
- Diamond Green Diesel
- Chevron Renewable Energy Group
- Eni S.p.A
- TotalEnergies
- BP
- Phillips 66
- Gevo Inc.
- Universal Biofuels Private Limited
- Other Prominent Players
Key Market Segmentation:
By Feedstock Type
- Used Cooking Oil
- Animal Fats
- Vegetable Oils
- Palm Oil
- Rapeseed Oil
- Soybean Oil
- Sunflower Oil
- Algae Oil
- Others
By Production Technology
- Fischer–Tropsch Synthesis
- Biomass Fermentation
- Alcohols Oligomerization
- Catalytic Hydrothermolysis
- Catalytic Hydrotreating
By End-Use Application
- Transportation
- Road
- Rail
- Marine
- Aviation (SAF)
- Power Generation
- On-grid
- Off-grid
- Industrial Equipment
- Construction
- Mining
- Agriculture
By Distribution Channel
- Direct Sales
- Fuel Stations
By Region
- North America
- Europe
- Asia Pacific
- Middle East and Africa
- South America
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